NETHERLANDS Law and Practice Contributed by: Jimmie van der Zwaan, Rob Langeveldt, Vasisthà Parmessar and Willem Koeleman, Borgen Tax
• no transactions that involve designated low-tax jurisdictions or jurisdictions that are on the EU blacklist; and • the saving of Dutch or foreign tax is not the sole or decisive motive for performing the (legal) act(s) or transaction(s). An APA request must contain relevant information and substantiate the TP methods applied. According to the amendment of the decree in 2023, the following information must be included in an APA request: • the master file, as referred to in Section 29g of the DCITA for qualifying MNEs; • relevant financial information, information about the products and a functional analysis; • a description of the proposed transfer pricing methodology, including comparability analysis; • assumptions supporting the APA request; • a description of the contractual terms, business strategy and market conditions; • the financial years for which the security is request - ed; • confirmation that none of the directors of the com - pany is on the EU blacklist; and • a draft standard form for the exchange of cross- border information exchanges. If a taxpayer does not provide the required informa - In the Netherlands, there is no formal deadline for sub - mitting an APA request. However, it is not possible to include fiscal years for which a tax return has already been filed under an APA. 7.6 APA User Fees No filing fees must be paid for requesting and/or obtaining an APA. 7.7 Duration of APA Cover The taxpayer shall, first, indicate the period for which the APA is requested. In principle, the ruling will be valid for a maximum of five fiscal years. If the facts and circumstances justify an exception – for example, in the case of long-term contracts – a maximum term tion, an APA request can be denied. 7.5 APA Application Deadlines
of ten financial years may be applied, with at least an interim review after five years. 7.8 Retroactive Effect for APAs An APA can have limited retroactive effect upon request, provided that the facts and circumstances have not changed since the period for which the tax - payer is requesting an APA and that the retroactive effect does not result in a lower taxable profit which is ultimately not taxed anywhere. For multilateral or bilateral APAs a roll-back is possible if all the countries involved agree that it is the correct application of the arm’s length principle and if they process this applica - tion accordingly. Again, it may not lead to profit that remains untaxed. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences In practice, the DTA does not usually impose penal - ties in transfer pricing cases. Under the law it may, however, decide to impose penalties for not having the required TP documentation available when due, or for non-compliance with CbCR obligations. TP Documentation For intentionally not having the documentation ready when required, imprisonment for up to six months or a fine of up to EUR10,300 can be imposed (Article 52 and 68 of the General Tax Law ( Algemene wet inzake rijksbelastingen ), Article 23 (4) of the Dutch Penal Code). The fine can be higher when not having the documentation leads to under-levied tax for a higher amount. It is, however, unlikely that the tax authorities will impose imprisonment. For non-standardised TP documentation for small and medium-sized enterprises (consolidated annual revenue below EUR50 million), the obligations are less strict. The DTA’s policy is to grant the taxpayer a reasonable period to hand in appropriate TP docu - mentation. The reasonable period is generally four to six weeks. Master file/local file documentation, on the other hand, is in principle due upon request, if the applicable corporate income tax return filing deadlines have passed.
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